Lessons from a Dying Business

Lessons from a Dying Business  

Redbox has built a successful DVD kiosk business, but its days are numbered. Here’s why that’s not such a bad thing, report Karl Stark and Bill Stewart at Inc.com. 

You’re probably familiar with Redbox, owner of those DVD-rental kiosks that you see parked outside of just about every neighborhood grocery store or pharmacy. Redbox is an excellent example of how to create growth from a business that will ultimately die. All growing companies can benefit from thinking more like Redbox.

Redbox has grown over the past decade by offering the convenience of DVD rentals via self-service kiosks. Owned by Coinstar (CSTR), RedBox revenues grew at a 73 percent compound annual growth rate (CAGR) between 2008 and 2010; in 2011, revenues are expected to grow 28 percent, topping $1.4B.

Redbox’s days, however, are numbered. In its current form, Redbox’s DVD business will eventually go the way of Blockbuster’s retail business, and be eclipsed by other ways for consumers to watch their favorite movies.

But here’s the twist: A business in decline can make money, and sometimes even grow profits in the process.

Find out what you can learn from the Redbox model.

Redbox is an excellent example of how to create growth from a business that will ultimately die.